It works well but....
... to configure your site completly mutlilingual is a very painful and nervewracking task.
Potentially all the stuff (menu, taxonomy etc.translations) is working fine but you have to follow the guidelines exactly. This is not that easy because documentation is all over drupal.org, the read me and good knows were. The explanaitions how Drupal has to be configured are very limited so it is very likely that you will go through some trial and error stints. Also it is hard to get multilingual variables but this seems to be a Drupal problem.
Moreover there is a critical bug left at the moment although the fix should have been released a while ago.
So the bottom line: You need it for multilingual sites but you will kick and scream during the process.
edit: I recognise that this module is a truckload of work and tackles a very complicated field but the maintanance of such an important module is subpar. Critical issues that are fixed don't get releases and patching on production sites is something a lot of people do not feel comfortable about.
So anybody with the skills to do it should give a helping hand.
Does what it says, if you follow the instructions
Using it in Drupal 6.x. This module works perfectly but you need to follow the instructions carefully. You'll be able to easily show the interface, content, menus, blocks in different languages once you learn it.
See instruction at module page and also this useful videotutorial:
Drupal Multilingual Sites Tutorial
Broke Everything (Drupal 5.x)
NOTE: everything about this module is totally different in 6.x and what I'm saying only applies to 5.x
My Drupal 5.x site was totally mauled by installing this module. It conflicted with so many other modules that I can't remember which ones they were, and caused huge messy fatal errors all over the place. We eventually went with Localizer instead, which offered the same features but didn't tear our site apart. Avoid i18n for 5.x at all costs.